Here are the key factors to keep in mind today for US Dollar trades:

• US Empire Manufacturing Index: Forex traders will get the regional manufacturing index for the state of New York today. Economists expect an increase to 4.50 in August from July where the Empire Manufacturing Index was reported at 3.86. Regional reports have been extremely volatile out of the US and forex trades should look deeper in the report in order to get a better picture of the strengths and weaknesses in today’s report. Items such as prices paid, orders and employment levels will represents a much better indicator about the health of the New York manufacturing sector.
• US NAHB Housing Market Index: Housing data is always important as the US consumer feels wealthier if the housing market is strong and expanding. A strong housing market often stimulates an increase in consumer spending which boosts the overall GDP figure. The NAHB Housing Market Index is expected to increase to 61 in August, up 1 point from the 60 which was reported for July. As today’s trading session is light on other economic data, this will be the biggest market moving fundamental report for the US Dollar.

Here is the key factor to keep in mind today for Japanese Yen trades:

• Japanese GDP: Japan reported its second-quarter GDP figure today which showed that the Japanese economy is once again contracting. Second-quarter GDP contracted by 0.4% quarterly and posted an annualized contraction of 1.6%, but despite the contraction in the Japanese economy it was better than expectations. Economists were looking for a bigger contraction of 0.5% quarterly and 1.8% annualized. The first-quarter GDP figure were revised and now show that the Japanese economy rose by 1.1% quarterly and surged by 4.5% annualized. This increase was largely due to business spending ahead of the April 1st hike ins sales taxes which forced many to make big ticket purchases prior to the increase in order to take advantage of a narrow window. The nominal second-quarter GDP showed a standstill and was reported at 0.0% quarterly. This missed economists’ expectations for an increase 0.1%. The first-quarter nominal GDP was revised lower as well and now shows a growth rate of 2.1%. Business spending posted an unexpected contraction of 0.1%. Economists expected no change, but the first-quarter business spending figure was revised higher to show an increase of 2.8%. Private consumption contracted much greater than the 0.4% expected and posted a contraction of 0.8% in the second-quarter.

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